PP 239-277.rrd

The economy of Mexico is diversified, with the highest proportion of activity in its formal economic structure. Services account for 47.3 percent of GDP, community and social services 22.4 percent, financial services 13.5 percent, and transport and communications 11.4 percent. Industry generates 28.2 percent of GDP, and agriculture 5 percent. The informal sector is large. Although estimates of its size and importance vary widely, it is reasonable to conclude that during 1999 about 15 to 25 percent (depending on the month of the year) of the urban workforce worked, although fewer than 35 hours per week. During the first quarter of 2000, the economy experienced vigorous growth, low unemployment, and an increase in consumption, and GDP grew by 7.9 percent year-on-year in real terms, the highest increase in three years. Nevertheless, the productive sector continues to be characterized by a dual structure that seems to have become increasingly differentiated in the wake of trade liberalization and the banking crisis of the 1990s. On one side is a dynamic export sector made up of internationally competitive conglomerates including maquiladoras; on the other is a less efficient domestic, market-oriented sector, dominated by microenterprises and smalland medium-scale enterprises (MSMEs).1 The linkages between the export sector and the domestic economy are weak, due partly to the importprocessing nature of the maquiladora industry, but also to the concentration of exports among a few large firms and the lack of competitiveness of many MSMEs. In addition, the two groups are financed differently: the first has access to international 12